SAC Capital Veteran Michael Steinberg Arrested: WSJ

By Brendan Conway

Federal authorities, deepening a criminal insider-trading investigation, continued to work their way up the ranks at SAC Capital Advisors LP.

Early Friday morning, Federal Bureau of Investigation agents arrested a longtime SAC Capital portfolio manager on insider-trading charges, making him the most senior employee of one of the nation’s most prominent hedge funds to be snared in the government’s sprawling probe.

Michael Steinberg, 40 years old, was led out of his building on New York’s Park Avenue in handcuffs around 6 a.m. Mr. Steinberg has worked at Stamford, Conn.-based SAC since 1997 and at its Sigma Capital Management unit in New York since 2003, dealing closely with SAC’s billionaire founder Steven A. Cohen. Details of the charges are expected to become public later Friday.

“Michael Steinberg did absolutely nothing wrong,” his lawyer, Barry H. Berke, said in a statement Friday. “His trading decisions were based on detailed analysis” and information “he understood had been properly obtained through the types of channels that institutional investors rely upon on a daily basis.”

Mr. Berke said Mr. Steinberg had been “caught in the crossfire of aggressive investigations of others [and] there is no basis for even the slightest blemish on his spotless reputation.”

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Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.